Supply chain Fundamentals

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This article is ideal for someone looking to enter the field supply chain or as a refresher to someone already in the supply chain. I would also strongly recommend this article to anybody wanting to learn about supply chain to add to their skills or even complement their current knowledge. We are never too old to learn. The supply chain is such an important field that having even the basic understanding will set you apart from the rest of the crowd. This is going to be a series of the article under the same heading. Today is the first part and let me introduce you to the Manufacturing environment in the supply chain.

– A manufacturing environment is a manufacturing strategy that is used by a company to produce its products.

– There are various strategies available:

1. Engineer-to-order

  • This strategy is used for products that require specific engineering design based on customer specifications.
  • It has the longest delivery time of all the other manufacturing environments.
  • An example would be a bridge or a building.

2. Manufacture-to-order (make to order)- MTO

  • Under this strategy, manufacturing activities begin only after there is a customer or the product is made from standard materials with very little engineering design required.
  • An example would be McDonald’s or any other fast-food restaurant.

3. Assembled-to-order (ATO)

  • With this strategy, standard components or assemblies are already available in inventory.
  • Once the order is received the final product is assembled per the customer’s configuration.
  • An example would be personal computers. Dell uses this model.

4. Manufacture-to-stock (MTS)

  • With this strategy, products are manufactured to our forecast and held in inventory until a customer order is received.
  • It has the shortest delivery time as the product is already in stock and ready to ship
  • An example would be everyday household items.

5. Mass customization

  • With this strategy, the product is made in many different configurations mainly from stock components and is quickly assembled in high volume.
  • An example of bicycles that are made in many different sizes shapes and colors.

I should point out that some professionals may use slightly different wording which is nothing more than minor variations in subcategories to this list.

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